A Downey man who operates second-hand clothing stores across the Los Angeles area pleaded guilty Friday to failing to report $3.7 million in corporate income to the Internal Revenue Service.

Jose Martin Andrade Flores, 53, owner and operator of American Superior Used Clothing Inc., entered his plea in Los Angeles federal court to filing a false corporate tax return for the 2013 tax year, according to the U.S. Attorney’s Office.

American Superior was in the business of recycling used clothing, which it then resold at retail stores located on Melrose Boulevard and in Hollywood, Echo Park and Pasadena. The company also engaged in bulk wholesale transactions with buyers worldwide, as well as selling merchandise at Rose Bowl swap meets and sidewalk locations in East Los Angeles.

From 2012 through 2016, Flores concealed from his corporate tax preparer cash sales and deposits into foreign bank accounts that were made on behalf of American Superior. As a result, Flores admitted in court, the tax returns he filed for American Superior for those five years failed to report a total of $3.7 million in income to the IRS.

U.S. District Judge Christina A. Snyder scheduled sentencing for Dec. 3, when Flores faces up to three years in federal prison.

As part of the case, Flores agreed to pay all back taxes, interest and penalties associated with his failure to accurately report American Superior’s income.

Prosecutors said Flores has paid the IRS $1.1 million, which includes $439,632 in penalties.

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